The Association of Ghana Industries (AGI) is exploring ways of getting government on board to provide equity financing for ailing local businesses in order to resuscitate and expand such businesses.
According to AGI President, Dr. Yaw Adu Gyamfi, the Association is already in discussions with government in a “low key area” on the possibility of the state taking over some businesses, maintaining that it is about expansion – how do we get equipment which will basically help us to increase our production, now businesses do not have the funds; going for loans from banks, of course, comes with very high interest.
Speaking at the 59th Annual General Meeting of AGI, he stated: “My request to government is that if it can basically take equity, for example, it can bring one million dollars into your company, saying ‘I am taking some ownership of the company of at least 30 percent; now, when things go well and you pay us, you get your money back’, which would be a laudable idea for a lot of companies which are cashstrapped in terms of expansion”.
For him, the time has come for businesses to be supported – stressing that instead of government asking businesses to go to the banks and borrow money, “It has to look at it from a different view, in the sense that we want to take equity and give you money so the ownership, governance, management of the company will be run hand in hand with government until the money is paid-off. We think it is a very laudable idea that government needs to pursue with us”.
Additionally, he pointed out that when this arrangement comes off, local companies will become productive and efficient, which will help increase productivity as well as help with the whole transformation of Ghana’s economy.
At the meeting, he also urged members to provide data on their businesses in order to help create business partnerships and linkages in the ECOWAS bloc as well as stay united to take advantage of the Africa Continental Free Trade Agreement (AfCFTA).
Finance Minister, Ken Ofori-Atta, indicated that the concerns of AGI which have to with the 50 percent benchmark value on import duties will be looked at, but maintained that all policies government has introduced are not intended to hurt businesses.
He also added that beginning next year, government through the Ghana Revenue Authority will increase the campaign on tax compliance and revenue mobilisation.
Other policies such as the GH₵2billion facility will be made available to support entrepreneurs, and the National Development Bank will also strengthen the banking sector as well as develop an industrial policy that will make Ghana become a net exporter.
The Chief Director from the Ministry of Trade and Industry, Patrick Nimo, urged AGI members to leverage on the opportunities AfCFTA presents and assured them of government’s continuous support.
He also disclosed that the Business Consultative Portal – which is an interactive portal to enable policymakers easily consult affected businesses and individuals in a transparent and timely way, and at considerable cost-savings – is expected to be launched soon.
The AGI is a not-for-profit business organisation, recognised as the private sector’s leading voice. It is engaged in policy advocacy, business services, research services and training.
This year’s AGM was under the theme ‘Positioning Local Industries for Global Competitiveness’, and the occasion was used to elect new members to steer the association’s affairs for the next two years, commencing 2020 to 2021.